If you follow me on Twitter, you know that I am a vocal critic of those New York Jets and an unsolicited commentator on all things Real Housewives.
But you may also have realized that I am a tireless fighter for the search engine marketing crowd and asset segmentation.
Brand vs. Non-Brand, First-Time Consumer vs. Repeat Visitor, High HHI (High Household Income) 25-35 Women Voucher Recipients Vs. Over 65 Voucher Shoppers… Every item and audience is different.
It doesn’t make sense to keep everything in the same standard of measurement.
One might say, “John, I have a total goal. I foresee all efforts to hit it. Otherwise, it’s not worth running it.”
I replied, “Okay, break this down for me. How much does your branded click cost versus your non-branded CPC, or how much higher than the first rate does your repeat shoppers convert?”
While you can have an overall goal, you still need to realize that each item will work differently.
Moreover, the different levels of performance should unite into a single KPI (KEY Performance Indicator).
If you continue to cancel all efforts that don’t meet the overall KPI you set across the board, you’ll fail to win new customers, and soon you’ll have a diminishing level of traffic.
Need proof? Well, there you go
Here we note “Client N.”
It’s a direct-to-consumer e-commerce brand that sells bacon and assorted smoked meats (yes, they’re delicious).
We categorize targets based on primary brand vs. non-brands, but also by NTF (first-time buyers) vs. repeat buyers.
Average Order Value (AOV) is based on pricing, which is based on market price, so we focus on increasing conversion via ROAS (Return on Ad Spend).
We know we’ll get two to three purchases a year for five years from a customer in a lifetime.
So while it’s very cost effective to have repeat purchases on our brand and it pays the bills, we recognize that it’s now considered a depreciated asset.
As a marketer, do you push hard on consumables because they’re low cost, or do you pay a new customer’s wazoo amount upfront, knowing it will become extremely cost-effective on their second purchase?
spoiler: Never stop supporting repeat customer, but push hard for first time customer.
For this reason, we have six different KPIs (and their causes):
- Low level KPI for CPC.
- The reason: They are brand loyal, and have a high probability of buying, so we want to make our CPC (Cost Per Click) as low as possible to direct them to the product we want to drive.
- High traffic KPI and medium level CPC KPI.
- Reason: aware of the brand, usually the recipient of gifts or other marketing means, high conversion probability, higher CPC, so if we can control it, it will be better ROAS in the long run.
- CPA (Cost Per Procedure) KPI.
- They don’t have loyalty, they bought once before but never got back to us by name, so it makes sense to focus on a specific CPA target because another purchase after that is less likely.
- It is important to note that this is the least valuable customer and shows a lack of brand loyalty.
NTF is not branded
- High traffic and high impression post KPI.
- You want as many of these as possible, and in a crowded market you often have to give up cost (because this won’t come cheap) for visibility (make sure you have great advertising in place.
- You will compensate on the back end for the conversion.
Shopping (we don’t separate NTF from redundancy)
- Transfer volume and ROAS KPI.
- This is our money maker after brand. Increase your sales volume as much as you can. Clicks are cheaper compared to an ad unit. Just make sure you don’t drop below 110% ROAS.
presentation / video
- KPI Brand Awareness.
- This does not get us direct sales. It builds brand awareness, so we do the lowest CPM on our 30-second videos and CPM (cost per 1,000 impressions) on our display and test regionally to determine the level of first-time brand visitors.
- We harvest visitors for remarketing.
Another example is “Customer S.”
They are a chain of senior citizens’ communities across the country.
Their focus is on generating lists of leads via form submissions or phone calls of a certain duration.
As always, we sort by brand, keyword, and non-brand services. Each service has a different lifetime valuation as recurring revenue.
Independent living has the advantage of larger size, longer lifetime value, and lower income per resident.
While at the other end of the spectrum, Memory Care is the lowest volume and shortest LTV but has the highest initial revenue in the first three years.
In this scenario, we set the KPI through the service line (ignoring the lack of brand traffic, it’s not about us because each site has a different name).
We operate with three different KPIs:
- High traffic and low CPC KPI.
- Huge amount of competition, so if you have a good price and a good location, the goal is pure volume. But if your CPC (from the competition) rises above $11, there’s a quick chance that clicks will fall off a cliff, as there’s no extra budget.
- CPA KPI.
- Less competition, but with a higher degree of searchers, which lowers your click-through rate (CTR) and increases your CPC. The key is to focus on the CPA itself while realizing that survival is 25% of independent living. Revenues in three years in the care of memory exceed revenues in eight years in independent living.
- Low KPI CPC.
- There is a lot of competition out there, and everyone is seen doing a lot of research on this topic. You don’t have to be in position 1, just be visible, get traffic as little as possible, because, with fixed budgets, a CPC swing to $0.50 can lower your traffic.
Well, I saw your proof. What now?
Once we have identified the necessary KPIs, we set target numbers to achieve for each.
This means things like “a branded recurring CPC cannot exceed $0.50” or “a non-brand NTF needs to drive at least 250 clicks per week with an impression rate of 15%, and a CPC of no more than $0.75”.
We then divide the budget from most valuable to us to least in the budget distribution.
Then we can determine if the budget allocation will meet your overall ROAS goals.
No two accounts are the same (it’s like calling the Jets and Giants the same NFL team).
However, not every asset in an account is the same.
Therefore, keeping a first-time searcher of Cherrywood Bacon with the same CTR, CPC, CVR (conversion rate), and ROAS to buy back on brand terms buying a beef hash is like comparing apples to oranges.
Maintaining separate goals, strategies, and KPIs will result in more predictable and accurate performance results.
- Top 6 KPIs you should be tracking
- How impression-based KPIs drive campaign performance
- PPC 101: A Complete Guide to the Fundamentals of Pay-Per-Click Marketing
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